Manufacturers build customer trust with SAS business analytics

Companies improve product quality and customer satisfaction, reduce warranty and inventory costs

SINGAPORE . – Manufacturers in Asia Pacific, while coping with dramatic declines in exports, are poised to ride improving regional economic developments into 2010 with software from SAS, the leader in business analytics. In October, SAS will release enhanced versions of software specifically targeted at the evolving needs of global manufacturers: SAS® Warranty Analysis and SAS® Service Parts Optimization enable manufacturers, distributors, retailers and those involved in aftermarket parts and maintenance to adjust and optimize operations at any stage before, and even after, a product reaches customers.

The economic crisis presents both opportunities and challenges. To thrive, manufacturers must lower costs, use resources more effectively, and make faster and smarter business decisions. Successful manufacturers such as steel giants POSCO in Korea and BaoSteel in China, carmaker Shanghai GM in China, and high-tech developer Wistron Corp. in Taiwan rely on SAS business analytics. SAS helps them maintain high product quality, forecast demand, reduce costs, cut waste, improve margins and competitiveness, and enhance operational efficiency.

One of the world’s largest steel producers, Korea’s POSCO uses SAS analytics to enhance its quality efforts. “Only SAS and its analytics empowered us to discover fundamentally new insights into our physical processes,” said Ill-Chul Shin, Manager and Master Black Belt at POSCO’s Six Sigma Academy. “The end result was that we could decrease the scrap ratio from 15 to 1.5 percent, giving us a US$150,000 return on investment from this part of the process alone.” In 2004, POSCO invested US$35 million in its Six Sigma implementation. In return, POSCO has realized nearly US$450 million in savings. “SAS has directly contributed an ROI of US$14 million on Six Sigma projects and an additional US$1.5 million on other projects, said Shin. Those savings help POSCO remain viable, and help it pass along savings to its wholesalers and distributors.

China’s largest iron and steel manufacturer, Shanghai Baosteel produces 30 million tons annually and employs 108,900 workers. That scale of operation produces a huge amount of data – on materials, output, sales, shipping, billing, suppliers, customers and more. “With the help of SAS software, this vast amount of data is being put to good use in order to monitor and improve the company’s performance in every important area, from quality control to shortening delivery cycles, from improved inventory management to control cost accurately,” said Guocheng Wu, Chief Technique Expert in Baosteel Group’s Operation Improvement Department. “We are very pleased that we can work with SAS to improve our competitive advantage.”
“Consumer Value Chain” – increasing value at every stage

Manufacturing is a cornerstone of the consumer value chain – a series of processes through which a product passes, from raw materials to finished goods. At each stage, manufacturers, suppliers and retailers can add value. When optimized through business analytics, supply chains and factory and retail operations can substantially improve product quality, operational and supply-chain efficiency, and customer satisfaction.

“Companies need to understand how every last bolt, part and piece of inventory, during and after production, affects customers and the bottom line,” said David Hughes, SAS’ Vice President of Asia Pacific. “The consumer value chain starts with manufacturing. SAS strengthens this value chain by helping manufacturers like POSCO, BaoSteel, Shanghai GM and Whirlpool optimize critical processes from the factory floor to the distribution center, retail showroom and beyond. Using SAS’ powerful business analytics, these companies save time and money, and deliver higher quality products -- steel, cars or refrigerators -- that build customer satisfaction and loyalty.”
SAS Warranty Analysis

Used by home appliance manufacturers Sub-Zero and Whirlpool, among others, SAS Warranty Analysis integrates warranty and other text and structured data with customer, product and geographic information so manufacturers can detect problems before they become major and speed remedies. By lowering warranty costs and increasing customer satisfaction, SAS helps manufacturers improve product quality and brand reputation.

October’s new version offers:

* Automatic detection of emerging issues before they have significant impact on performance, costs and brand value.
* Quick prioritization of issues so companies can focus on what is most important.
* Determination of which combination of attributes drive failures so companies can allocate resources efficiently.

Shanghai GM, a joint venture between General Motors and Shanghai Automotive Industry Corp. (SAIC), is one of China’s largest auto manufacturers. Despite its US parent filing for bankruptcy, Shanghai GM has seen sales hit new highs on strong demand from China’s increasingly affluent middle class and from incentives to stimulate domestic consumption. Shanghai GM sold 288,843 vehicles in the first half of this year, up 16.1 percent year on year. In June alone, sales hit a monthly record of 60,356 units, up 59 percent from last year.

Equipped with the latest industry best practices and technology for warranty analysis from SAS, Shanghai GM is living up to its reputation as the leader in China for customer service and quality. “SAS Warranty Analysis has allowed Shanghai GM to reduce the warranty analysis cycle time by 70 percent within the first six months and to substantially cut warranty costs – the main objectives for the system.” according to Nanxiang Gao, Warranty Business Representative and Field Performance Engineer in Shanghai GM’s Quality Department.

Today Shanghai GM is an industry leader in terms of warranty best practices. Not only has the project been nominated for an SAIC Technology Innovation Award, but its reputation is reaching beyond China, with General Motors Global Warranty closely looking at Shanghai GM’s achievements.
SAS Service Parts Optimization

With SAS Service Parts Optimization, leading international manufacturing companies like Norwegian agricultural equipment manufacturer Kverneland forecast parts demand and optimize parts inventory. The software helps service organizations maintain adequate stock levels and achieve targeted service levels while reducing inventory costs. October’s new version offers:

* Targeted interfaces and workflows that reflect day-to-day forecasting and inventory analysis activities for parts planning, inventory optimization and replenishment.
* Visualization of entire distribution networks so planners can review and act on multi-echelon (from factories to distribution centers to retail stores) inventory information and make proactive adjustments.
* Enhanced analytics for parts planning including pooling, transfers and reallocation.
* Flexible architecture for implementing solutions in a phased, step-by-step manner.

Belgian pharmaceutical company CV Vooruit uses SAS to manage more than 10,000 products from more than 200 suppliers. With SAS business analytics, the company has increased inventory turns five-fold and service level performance by 3 percent. Overall product availability has improved while inventory costs have dropped.

Today’s announcement was made at The Premier Business Leadership Series event in Singapore. Presented by SAS, The Series event brings together more than 650 public and private sector attendees from across the Asia-Pacific region and around the world to share ideas and knowledge on critical business management issues. (See event press kit at http://www.sas.com/singapore09.)